Rod McQueen's Blog, page 63

The day there was no news

What the heck was that piece on page one of The Globe and Mail this morning? "Thumbs down for RIM's shakeup" blared the headline across all five columns above the fold.

It's not a news story, there are no quotes. It's not an opinion piece, there is no opinion. It's not an editorial, there is no prescription. At four paragraphs it's too long to be a blurb, although there is a separate pointer to stories in the ROB. There's no byline; the writer is anonymous. I can't give you a link because I can't find it online.

Is it a creative orphan or just old-style journalism with a promising headline followed by words that fail to deliver. Maybe the newly appointed Public Editor can look into it and let me know.

The sea change at RIM

Mike Lazaridis and Jim Balsillie did the right thing by resigning their roles yesterday as co-CEOs and co-Chairs of Research In Motion. I had different replacements in mind on December 16 when I urged this course in a blog (Time for them to go), but the succession by former Chief Operating Officer Thorston Heins makes eminent sense.

Or does it? Everyone went to some lengths yesterday to say how smooth this all was. "What you will see with me is rigor and flawless execution," new CEO Heins told The Globe and Mail. He will hire a new head of marketing. But selling what you've got matters little if your products have fallen as far behind as RIM's. Heins must also devise new ideas that close an ever-widening gap with competitors.

The role of Prem Watsa, founder and CEO of Fairfax Financial Holdings, has been crucial in this resuscitation. Interesting that while the media published many a rumor of late, no one caught a whiff of the real story. Share price is bound to jump when markets open this morning. A more relevant long-term development may be the opportunity for some at RIM to leave and start their own companies. Not everyone will fare well under this new boss. Such departures are to be welcomed; there have been far too few such seeds spread in the past.

As for Mike and Jim, they will play a continuing role at RIM, but life will never be the same again. Both are about to turn 51: Jim on February 3, Mike on March 14, leaving them lots of time to save the world in some new way. As a co-founder, Mike will remain involved with innovation. Jim will have a harder time filling his dance card with meaningful roles. The Phoenix Coyotes may be moving to Hamilton yet.

Meanwhile, as Jim said in 2006 when RIM paid $612.5 million to settle a patent dispute, "We took one for the team."

Face-to-face art

Amanda Clyne, a talented young Toronto artist, has a solo exhibition at PM Gallery, 1518 Dundas St. W. Her work is unique. She begins with a woman's head and shoulders taken from a fashion magazine and makes a print on special paper that never dries resulting in an image that looks like it's been done on a blotter. Next, Amanda uses Photoshop to further refine the image, fractures it into vertical strips, then creates large-scale, compelling paintings based on the outcome.

I'm oversimplifying a labor-intensive process; take a look at her website for examples. See how the eyes meet yours; some will disturb, others seem vulnerable.

My daughter Alison and I attended Amanda's talk at the gallery yesterday. Alison, who is a professor of Art History at McMaster University, listens to a lot of such presentations. She said this was the best she'd ever heard. In addition to explaining her methodology, Amanda told the gathering about the intellectual underpinnings. In doing so, she cited other artists such as Jeff Wall, Gerhard Richter, Francis Bacon and Chuck Close. She also quoted literary giant Northrop Frye and art critic Gary Michael Dault. Few people could rattle off such authorities without sounding pretentious; Amanda made them sound like an integral part of her everyday life.

Half the paintings in the show are already sold but all remain to amaze the eye and touch the heart. You'll have to hurry. The show closes January 28.

Call me Ishmael

What ever happened to the great nicknames in sports?

Think about baseball players: Dizzy Dean, Pee Wee Reese, Satchel Paige, Charlie Hustle and Babe Ruth. From basketball there was Air Jordan, Wilt the Stilt, Dr. J., Hakeem the Dream, Earl the Pearl and Magic Johnson. Football offers Nobby Wirkowski and Bibbles Bawel. Hockey had The Golden Jet, Rocket Richard, Teeder Kennedy and Turk Broda. In golf, there was The Golden Bear; in boxing, Smokin' Joe Frazier.

In the modern era, everything comes up short. A-Rod? A non-starter. Joey Bats? An abomination. The Kid? Every neighbourhood has one.

Maybe the problem is that sports has become more of a business than entertainment for the masses. No player stays in one place long enough to be given a nickname by the locals. Who wants to invest in a guy who's going to be gone next year to a competing team, replaced by someone else who's already been in three cities.

As Lawrence Peter "Yogi" Berra may or may not have said: A nickel isn't worth a dime today.

Las Vegas losers

I'm saddened to read reports from attendees at the Consumer Electronics Show in Las Vegas this week. Announcements from Research In Motion are not causing any buzz. While the updated PlayBook will have fully integrated email, calendar and social media feeds, T. Michael Walkley, an analyst with Canaccord Genuity, wrote in a report yesterday that sales "could continue to struggle versus improving Android and iOS tablet offerings." As for RIM's next batch of smartphones, not expected to be available for months, they "will launch into an even more competitive smartphone market" against Android LTE, Windows offerings from Nokia, and a refreshed LTE iPhone 5, said Walkley.

National Bank analyst Kris Thompson is equally pessimistic in a report issued today. "RIM is in deep trouble; we don't see how the company can compete against all of these fantastic handsets after years of product delays and a declining developer community," said Thompson.

None of this is going to be cured if all RIM does is strip co-CEOs Mike Lazaridis and Jim Balsillie of their co-Chairman titles. Recent news reports have predicted that Barb Stymiest, a director since 2007, will be appointed non-executive chair. If this is the best the board can come up with after six months of study, that's slim pickings indeed. Such a move may satisfy corporate governance gurus, but it doesn't do anything to improve management or shake up the place.

When my book on RIM came out eighteen months ago, the company could do no wrong. Now RIM can do no right. I liked it better the old way and I'm not even a shareholder who has seen value plummet by 75 per cent.

The future is now

Here are my seven fearless predictions for 2012:

1. The problems in Europe are not over, but they will muddle along. Fear will subside.

2. Mitt Romney will defeat Barack Obama for the presidency.

3. The Bank of Canada will raise interest rates.

4. Kate and Wills will be pregnant.

5. The Canadian dollar will end the year about where it is now, 98 cents U.S.

6. Rob Ford will be charged with an offence.

7. The S&P/TSX Composite index, down 11 per cent in 2011, will rise by at least that amount in 2012.

Happy Holidays

Thank you for your loyal readership. Season's Greetings to all and a Happy, Healthy New Year in 2012.

Time for them to go

Much in all as it pains me to say this, it's time for Mike Lazaridis and Jim Balsillie to step aside at Research In Motion. After almost twenty years as co-CEOs, the world record long ago set, the company needs new leadership. The offer by Mike and Jim to reduce their salaries to $1 a year is bold but does not speak to the issues involved.

Others need to participate in the solution. As share price plummeted 80 per cent this year, institutional investors have been unusually quiet. A modest revolt at the time of the annual meeting was snuffed out with the establishment of a committee. Given the lack of any obvious activity, the board must have been equally silent. In addition to Mike and Jim on the board there are seven outside directors including some big names: Barb Stymiest, former head of the TSX, and Roger Martin, dean of the Rotman Business School, among others.The directors are either quiesecent or happy and neither of those is a good strategy going forward given the successive blows of the last few months.

RIM blames marketing but that's not the problem, it's the products. RIM should dump PlayBook; it's become a distraction that's never going to gain traction. Fix the troubled 9900. Scale back the next round of new products so that prospective buyers don't have to wait another year for chip development.

Most importantly, RIM needs to appoint a new team. Here's my list: John Wetmore, a RIM director since 2007 and former CEO of IBM Canada, becomes Chief Executive Officer. Patrick Spence, who joined as a co-op student and is now managing director in London, becomes Chief Operating Officer. David Kerr, a RIM director and former Chairman and CEO of Falconbridge becomes Chairman of the Board. As a result, John Richardson, current lead director, can stand down since there's no longer a need for that role.

Lots of bright people bubbling with new ideas remain in the ranks at RIM but the firm has lost its focus. Only a major shakeup stands a chance of tapping those strengths again and regaining the corporate lustre that previously made Canadians so proud.

Deutschland uber alles

I'm not one to play Chicken Little but the situation in Europe appears to be intractable. For 18 months politicians and bureaucrats have been claiming to do something but so far little has been accomplished. To be sure, some holders of Greek bonds voluntarily took a haircut, central banks have acted in concert, and leaders in Greece and Italy are out but the situation just grows worse. Tomorrow marks the eight summit on the crisis this year.

The worst case scenario is a cascading collapse that makes the Great Depression look like Disneyland. Meanwhile net world debt just keeps on rising, up 11 per cent annually for the last decade, fuelled by low interest rates and people at all levels – from consumers to governments – who can't rein in spending to match income. Barack Obama saved capitalism once; no one seems able to act this time around.

For ordinary Canadians the impact has so far been muted. Anyone with a mortgage is happy with 4 per cent money, but investors are stuck in a rut. Retirement portfolios have gone sideways or down with no likelihood of rising anytime soon. Play it safe with GICs and your return doesn't match inflation.

The European Community was created so Germany didn't go to war again with its neighbours. The irony is that the only way out would see Germany run everything. That sounds like victory without a shot being fired. And a lot of collateral damage to the rest of us.

The grieving process

It's been six months since Sandy died. Anyone who has lost a spouse, a mother, a son, or a close friend knows what these past few months have been like. At first, I couldn't sleep at night and I couldn't stay awake during the day. My stress levels were high. Tears would flow without notice. I saw a man on the subway carrying flowers I assumed he was taking home to his wife. That used to be me. I stood there and openly wept.

Family and friends have been very supportive. Without them, I couldn't have made it this far. I worked in "our" garden most days this past summer. Sandy always called it her healing garden because she was diagnosed with cancer shortly after we moved to this house. She rebuilt what had been here and made it her own. Sandy always liked to move plants to new places; I was the designated digger. I used to call it "plants on wheels." If she had been alive this past summer, I would have been moving all kinds of things. But, you know, everything came up perfectly. There was something in bloom from May to November. There were plenty of different heights, shapes, leaves, and colours. Her vision was finally complete although she could not enjoy it in the flesh.

I still wear my wedding ring. After 46 years of marriage, it's just a habit. I keep fresh flowers on her bedside table. I come across notes she made and catch my breath. For a long while, I talked to her in the bedroom as if she were still there. I've stopped doing that because I know she's watching. I don't need to report.

Who knows how long this will go on. Probably forever in some form. And that's OK, too. In fact, that's exactly how I want it. It's almost like Sandy never left. Almost.